Question

what the relationship between the agency theory and earnings management ?

Answer 1

Agency Theory:

The office hypothesis is a supposition that clarifies the connection among principals and specialists in business. Office hypothesis is worried about settling issues that can exist in office connections due to unaligned objectives or distinctive abhorrence levels to chance. The most widely recognized organization relationship in back happens between investors (important) and friends administrators (specialists).

earnings management:

Earnings management is the use of accounting techniques to produce financial reports that present an overly positive view of a company's business activities and financial position.

relationship between the agency theory and earnings management :

On the off chance that profit the board is used essentially deftly by supervisors, firms where organization costs are more extreme should display a higher level of income the executives. . The experimental proof in our investigation demonstrates that there is a backwards connection between organization expenses and profit the board.